Reliance Industries Ltd (RIL) is set to bid for 2G spectrum across all circles in the coming auction, a move that could bring more competition among the big telecom companies.
Reliance, which bought a majority stake in Infotel Broadband Services, has a pan-India broadband wireless access (BWA) licence that allows it to provide broadband wireless internet, but not voice service. Once the liberalised spectrum regime comes into force, Reliance would be able to offer voice service using the BWA or 4G spectrum.
According to officials, the company wants to go for pure play voice spectrum, as well as complement its data services. An RIL spokesperson refused to comment on the matter.
Though non-voice services offer better margins and higher revenue, voice-based services make up the lion’s share of a telecom operator’s overall revenue.
In 2011-12, non-voice revenue as a percentage of total revenue was only 14 per cent. Of that, message-based services contributed about nine per cent and non-message based pure data services nearly five per cent. RIL’s entry in the already crowded telecom space could further intensify competition in the sector, resulting in a fresh round of rate wars.
This is not the first time the older Ambani brother is entering the voice space. Mukesh Ambani had made a big-bang entry in the telecom business by offering handsets bundled with services, priced at Rs 499. When the Ambani brothers split their business empire in 2005, the telecom business went to Anil Ambani. Reliance in June 2010 paid Rs 4,800 crore to buy 95 per cent of Infotel Broadband from the Mahendra Nahata-owned HFCL.